Changing surgical CPI valuation relationships: a method of determination (1970-1995)

Surgeons have, over the past 7 years, experienced a significant decrease in valuation of their services. This has been accomplished by use of the Resource-Based Relative Value System, and its interpretation and modification by various agencies of the federal government. Congress recently mandated a study of practice costs that could result in further reductions of up to 30%. In anticipation of this further reduction, it is important to understand in as accurate a way as possible what has happened thus far to the value for surgical services. Simple percentage in decrease of fees is well understood, but their decrease in relation to the cost of a constant market basket of goods has not been well publicized. We present a simple method for determining the change in value for any procedure or service done by a surgeon in relation to the cost of a constant market basket of goods for any period of time from 1970 to 1995. For example, the increase in the cost for the constant market basket of goods between 1972 and 1992 is shown to be 236%. The increase in value for a typical cardiothoracic procedure in the same time period was 52%. The valuation for this procedure has actually declined 55% from 1972 to 1992, relative to the market basket of goods. The service that would buy the complete basket in 1972 will now buy only 45% of the basket.